Huang Qiaoling was short more than 29 million yuan (US$3.5 million) of the 30 million yuan he needed to start the tourist and entertainment business he had envisioned.
So, as with most of China's entrepreneurs, the son of a farmer from China's eastern Zhejiang province was forced to begin by borrowing the start-up capital from friends in 1994.
Eight years later, from inside the oval office of his million-dollar Washington White House replica in the eastern city of Hangzhou, Huang rules over the Song Dynasty Town Group, a Disneyland-like empire worth 4 billion yuan.
The self-made entrepreneur is testament to market forces at work in China's fast-changing economy and the growing role of private enterprise in an increasingly affluent and modern nation.
Official statistics show private firms contributed 27 percent of China's 9.5 trillion yuan (US$1.1 trillion) gross domestic product last year, becoming a major engine of economic growth as well as bringing hope it will relieve the nation's massive joblessness.
Yet despite the clear paradigm shift in China's centrally dictated economic policies, getting a business of the ground remains a murky process which requires navigating a web of personal and political relationships and deals as complex as they are risky.
For hopeful entrepreneurs, the avenues to the acquisition of seed capital remain restricted, and those who are fortunate enough to have wealthy family and friends usually turn to them.
Other than personal favours, to begin a business independently needs approaching another firm with a good business plan or finding one of a handful of the country's venture capital firms, said China Europe International Business School management professor Zhang Weijiong.
Securing a government-sponsored incubator plan is another way, but that also requires capital.
Starting a business is very difficult without assets confirmed Huang, 44, whose group is made up of 20 tourist-related businesses in the eastern cities of Hangzhou, Nanjing and Ningbo and northeastern Dalian.
His own path to super-wealth could barely have begun in a more complex way, and Huang swears he would never choose to launch a business again.
It started with a 10 million yuan loan from friends. Huang promised to pay back borrowings with accruing annual interest rates of 20 percent.
He then persuaded a construction company to begin building hundreds of acres of an amusement park that include models of Amsterdam, Venice and ancient China streets without a down payment, promising 20 percent annual interest until the project was completed.
As building began, Huang insured the project at a value of 20 million yuan. That contractual agreement allowed him to borrow an additional 10 million yuan from banks.
Finally Huang asked a friend in Hong Kong to deposit 10 million yuan in a local bank and used that deposit as a guarantee on the next 10 million loan.
Such means were not an option for Shanghai's Yellow Submarine pizza chain co-owner Wu Dingming who sunk all his cash with an American business partner into his first pizza shop in 1994.
"It was not a big amount of money, but I was lucky that many foreigners came to my restaurant on the first day of business," he said.
"In China private business has little access to bank loans."
Ye Enguo, general secretary of the quasi-governmental Shanghai Private Enterprise Association explained that acquiring capital for a new business is an obstacle for many entrepreneurs.
"Currently, private firms still have problems borrowing money from banks. One reason is because Shanghai has not set up a reliable credit network," he said.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS